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RR RUEHAG RUEHDF RUEHLZ
DE RUEHFT #1931/01 2080832
ZNR UUUUU ZZH
R 270832Z JUL 09
FM AMCONSUL FRANKFURT
TO RUEHC/SECSTATE WASHDC 1245
INFO RUCNFRG/FRG COLLECTIVE

UNCLAS SECTION 01 OF 02 FRANKFURT 001931 
 
DEPARTMENT FOR EUR/AGS 
 
SIPDIS 
 
E.O.  12958: N/A 
TAGS: PGOV GM
SUBJECT: KURT BECK BRINGS SPD TROUBLES FROM HIS HOME STATE 
 
Sensitive but unclassified; not for internet distribution. 
 
1.(SBU) Summary:  Nearly a year after succumbing to party pressure 
to resign as chairman of the Social Democratic Party (SPD), 
Rhineland-Palatinate (R-P) Minister President Kurt Beck is facing 
new challenges at home.  His troubles may put in jeopardy the SPD's 
only state-level absolute majority and could signal the beginning of 
the end of Beck's 15-year reign there when state elections are held 
in 2011.  Nationally, the SPD -- trailing significantly in the polls 
behind its major rival -- can ill afford to see one of its top, 
albeit fallen, leaders hit with political criticism in the run-up to 
the September 27 parliamentary elections.  Local media are 
criticizing Beck for failing to quickly stop a dubious financing 
scheme -- over which his finance minister resigned on July 7.  The 
opposition Christian Democratic Union (CDU) and Free Democratic 
Party (FDP) will seek to use a parliamentary investigation into the 
issue to lay the groundwork for the 2011 state election campaign. 
Nonetheless, Beck faces little competition within his own party and 
his primary CDU rival lacks the charisma to compete with Beck's 
talents as a local campaigner, suggesting that Beck is likely to 
weather this storm and win reelection in 2011, even if his Social 
Democrats fail to win an absolute majority and have to share power 
with a junior coalition partner.  END SUMMARY 
 
 
 
Amusement Park Scandal: No Fun and Games for Beck 
--------------------------------------------- ---- 
 
¶2.  The July 7 resignation of R-P Finance Minister Ingolf Deubel 
over allegations that he engaged in dubious financing of the 
Nuerburgring amusement park is the worst political crisis ever to 
hit Beck in his home state, according to a contact in Beck's state 
chancellery.  In a special press conference on June 7, R-P Finance 
Minister Ingolf Deubel announced his resignation and admitted that 
the R-P government had failed to raise private capital for a 275 
million Euro expansion of the Nuerburgring amusement park. 
Apparently, Deubel was misled by a Swiss investor named Urs 
Barandun, whom Deubel had relied on to raise 50 million Euros from 
private investors.  Barandun missed several payment deadlines, and 
was standing trial in Dubai for allegedly issuing unsecured checks. 
Minister President Kurt Beck -- who until last week fully supported 
Deubel's financing plan -- apologized for failing to stop the 
negotiations with Barandun at an earlier stage.  The CDU and FDP in 
R-P have publicly signaled their intention to initiate a 
parliamentary investigation into the matter at the beginning of 
September. 
 
¶3.   (SBU) A contact in the  R-P state chancellery in Mainz, said 
that he expects the parliamentary investigation to last until the 
end of 2010 and to directly impact the state election in early 2011. 
 He said that Beck had completely delegated the Nuerburgring project 
to his finance minister and had failed to exercise adequate 
oversight, which he suggested may be a sign of wear after more than 
15 years in office.  While the chancellery contact does not expect 
Beck to step down over the issue, he said that Beck is likely to 
come under more pressure especially if the amusement park proves 
less popular or less profitable than expected.  The contact, 
however, was still confident that Beck would lead the SPD party list 
in the next state election.  (Note: This contact suggested that, 
thereafter, Beck might consider handing over the reins to one of two 
likely successors:  Roger Lewentz, a state secretary at the R-P 
Interior Ministry, or Doris Ahnen, the R-P Minister for Education, 
Science, Youth and Culture.) 
 
 
 
Light at the End of the Tunnel for R-P CDU? 
------------------------------------------- 
 
¶4.  After 18 years in opposition, the CDU is seeking to use the 
Nuerburgring crisis and the first forced resignation of any of 
Beck's ministers to erode Beck's remarkable popularity in the state. 
 The CDU and the FDP will seek to use the parliamentary 
investigation to make the Nuerburgring scandal a central theme of 
the 2011 election campaign.  The opposition's ability to capitalize 
on the scandal may be limited, however, because both the CDU and FDP 
have vocally supported the project in the past to boost the economy. 
  The CDU was not involved in the financing aspects of the deal, 
however, and Hoffmann said the CDU will seek to criticize the 
financing mistakes rather than the merits of the project.  According 
to a chancellery contact, however, even with the investigation, the 
CDU is unlikely to pose a serious threat to Beck's power because R-P 
CDU chair Christian Baldauf probably does not have enough charisma 
to compete with Beck's personal popularity among regular voters.  . 
 
 
¶5.  COMMENT:  Beck may have been looking forward to a short respite 
from the stresses of national politics when he resigned as SPD 
 
FRANKFURT 00001931  002 OF 002 
 
 
chairman last fall and gave up hopes to be the party's chancellor 
candidate.  Instead, he is facing a number of scandals and a more 
critical press that could threaten the R-P SPD's absolute majority 
in upcoming state elections.  The opposition will certainly seek to 
use a parliamentary investigation into the Nuerburgring scandal to 
paint Beck as negligent. Beck's personal popularity and proven 
ability to appeal to the average voter in the state, however, will 
make him a tough incumbent to beat.  Beck's troubles and coverage in 
the press will not serve the national SPD in its efforts to boost 
its standing in the polls two months before national elections.  END 
COMMENT. 
 
¶6.  This cable was coordinated with Embassy Berlin. 
ROSEN